IndiaFirst Life Micro Bachat Plan is a Non-Linked, Participating, Limited Pay, Micro Life Insurance Plan. It not only provides a shorter pay commitment of 5, 7 or 10 years but also gives you savings and protection in a single policy.

This IndiaFirst Life Micro Bachat plan is a mix of disciplined savings and protection for your loved ones.

What are the features of the IndiaFirst Life Micro Bachat Plan?

Choose a premium payment term of 5, 7, or 10 years to achieve your long-term financial goals.
Enjoy continued life cover for one full year even if you miss a premium, provided you have paid premiums for at least one full year.
Enhance your savings potential with the possibility of annual bonuses (if declared).
Receive the Sum Assured at Maturity, along with any accrued bonuses at the end of the policy term.
Secure your family with the optional Accidental Death Benefit, offering additional protection against unforeseen events.
Avail potential tax benefits on premiums paid and benefits received, as per the prevailing tax laws.

Who is eligible for the IndiaFirst Life Micro Bachat Plan?

Criteria	Parameters
Age at Entry	Minimum	Maximum
	18 years for policy terms of 10, 12 and 15 years	45 years for policy term 10 years
		45 years for policy term 12 years
		50 years for policy term 15 years
Maximum Age at Maturity	55 years for policy term 10 years
	57 years for policy term 12 years
	65 years for policy term 15 years
Premium Payment Term & Policy Term	Premium Payment Term	Policy Term
	5	10,15
	7	12, 15
	10	15
Premium	Minimum	Maximum
	Rs. 1000 Yearly	Subject to Maximum Sum Assured of Rs. 10,00,000
	Rs. 512 Half yearly
	Rs. 259 Quarterly
	Rs. 87 Monthly
Premium Paying Modes -Modal Factors	Yearly
	Half yearly – 0.5119
	Quarterly – 0.2590
	Monthly – 0.0870

What are the benefits of the IndiaFirst Life Micro Bachat Plan?

1. Death benefit

The nominee will receive the death benefit based on the chosen option.

Life option

Guaranteed Sum Assured on Death (10 times of Annual premium) + Accrued bonuses (if any) and terminal bonus, if any, will be paid.

The minimum death benefit shall be at least 105% of the Total Premiums paid as on the date of death

Extra Life option

Death Benefit as mentioned above + An additional death benefit on Accidental Death, which is equal to the Guaranteed Sum Assured on death, will be paid.

Guaranteed Sum Assured on Death is 10 times the Annualized Premium

2. Maturity benefit

The policyholder will receive,

Guaranteed Sum Assured at Maturity, plus
Accrued Simple Reversionary Bonuses, if any, plus
Terminal Bonus, if any

3. Bonuses

Simple Reversionary Bonus (SRB): The Simple Reversionary Bonus, if declared, will be calculated on the Guaranteed Sum Assured at Maturity. The Simple Reversionary Bonus rates are not fixed or guaranteed and may change from time to time.

Terminal Bonus (TB): Terminal Bonus, if any, will be paid either on death or on maturity or on surrender as per the terms and conditions of the policy.

Grace Period, Discontinuance and Revival of IndiaFirst Life Micro Bachat Plan

Grace Period

This IndiaFirst Life Micro Bachat Plan policy has a grace period of 30 days for yearly, half-yearly and quarterly frequencies and 15 days for monthly frequency from the premium due date.

Discontinuance

In the event of non-payment of premium due under the policy within the grace period, the policy will lapse if less than one full year’s premium has been paid. The risk cover will cease, and no further benefits will be payable.

In case of non-payment of premium before the expiry of the grace period, the IndiaFirst Life Micro Bachat Plan policy will acquire paid-up value provided that at least one (1) full year’s premium has been paid.

Revival

You may revive your IndiaFirst Life Micro Bachat Plan policy within five years from the due date of the first unpaid premium, but before the maturity date.

Free Look Period for IndiaFirst Life Micro Bachat Plan

In case you do not agree to any policy terms and conditions, you have the option of returning the policy within 30 days from the date of receipt of the policy, whether received electronically or otherwise.

Surrendering IndiaFirst Life Micro Bachat Plan

The IndiaFirst Life Micro Bachat Plan policy will acquire surrender value after one full year’s premium has been paid. At the time of surrender, a higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV) will be payable.

The surrender value payable will vary by policy term and policy year of surrender.

What are the advantages of the IndiaFirst Life Micro Bachat Plan?

Access a loan of up to 95% of the available surrender value.
opt for the Waiver of Premium Rider to ensure plan benefits continue in case of death, accidental total permanent disability, or specified critical illnesses.
Choose to receive the death benefit as a lump sum or in instalments over a period of 5 years.

What are the disadvantages of the IndiaFirst Life Micro Bachat Plan?

The return on investment is low.
Bonuses are not guaranteed.
The sum assured may be insufficient to meet a family’s basic financial needs.
Both the premium payment term and policy term are fixed.

Research Methodology of IndiaFirst Life Micro Bachat Plan

The Internal Rate of Return (IRR) calculation helps assess the cash flow pattern and return percentage of an investment.

In the IndiaFirst Life Micro Bachat Plan, after completing the limited premium payment period, the maturity benefit is received at the end of the policy term, depending on bonus declarations.

The potential returns are estimated based on figures from the policy brochure.

Benefit Illustration – IRR Analysis of IndiaFirst Micro Bachat Plan

Consider a 40-year-old male opting for this plan with a Sum Assured of ₹2.49 lakhs, a policy term of 15 years, and a premium payment term of 5 years, paying an annual premium of ₹24,963.

Male	40 years
Sum Assured	₹ 2,49,630
Policy Term	15 years
Premium Paying Term	5 years
Annualised Premium	₹ 24,963

Upon paying premiums regularly, the maturity benefit depends on declared bonuses. The illustrated bonus rates of 8% and 4% are not guaranteed.

		At 4% p.a.		At 8% p.a.
Age	Year	Annualised premium / Maturity benefit	Death benefit	Annualised premium / Maturity benefit	Death benefit
40	1	-24,963	2,49,630	-24,963	2,49,630
41	2	-24,963	2,49,630	-24,963	2,49,630
42	3	-24,963	2,49,630	-24,963	2,49,630
43	4	-24,963	2,49,630	-24,963	2,49,630
44	5	-24,963	2,49,630	-24,963	2,49,630
45	6	0	2,49,630	0	2,49,630
46	7	0	2,49,630	0	2,49,630
47	8	0	2,49,630	0	2,49,630
48	9	0	2,49,630	0	2,49,630
49	10	0	2,49,630	0	2,49,630
50	11	0	2,49,630	0	2,49,630
51	12	0	2,49,630	0	2,49,630
52	13	0	2,49,630	0	2,49,630
53	14	0	2,49,630	0	2,49,630
54	15	0	2,49,630	0	2,49,630
55		1,50,000		2,10,750

	IRR	1.42%		4.10%

At a 4% bonus rate, the maturity value is ₹1.5 lakhs, yielding an IRR of 1.42% as per the IndiaFirst Life Micro Bachat Plan maturity calculator.

At an 8% bonus rate, the maturity value is ₹2.10 lakhs, resulting in an IRR of 4.10% as per the IndiaFirst Life Micro Bachat Plan maturity calculator.

These returns are lower than those offered by a savings bank account or a bank fixed deposit.

Despite a 15-year policy term, the plan fails to grow savings into a meaningful corpus. As a result, it may not help in meeting the rising costs of financial goals. Moreover, the sum assured is too low to provide adequate financial security for a family.

Overall, the IndiaFirst Life Micro Bachat Plan falls short in both insurance and investment aspects, making it an inefficient choice for wealth creation and protection.

IndiaFirst Life Micro Bachat Plan Vs. Other Investments

Combining life insurance with investment is not the most effective strategy. Instead, let’s explore an alternative approach by separating these two components. Using the same illustration metrics, we will analyse a different scenario.

IndiaFirst Life Micro Bachat Plan Vs. Pure-term + ELSS

The IRDAI has introduced Saral Jeevan Bima, a standardized pure-term insurance policy available across all insurers. This simple and uniform plan ensures financial security for a family in the event of the primary earner’s untimely demise.

The minimum sum assured starts at ₹5 lakhs, with a maximum limit of ₹25 lakhs.

In comparison, the IndiaFirst Life Micro Bachat Plan caps the sum assured at ₹10 lakhs (Basic Sum Assured – ₹2 lakhs), which is below IRDAI guidelines. To ensure a fair comparison, we assume a minimum sum assured of ₹5 lakhs.

A pure-term insurance policy with a ₹5 lakh sum assured costs ₹7,600 annually for a 15-year policy term with a 5-year premium payment period. Out of the ₹24,963 annual budget, the insurance premium is covered first, and the remaining amount is allocated for investment.

Pure Term Life Insurance Policy
Sum Assured	₹ 5,00,000
Policy Term	15 years
Premium Paying Term	5 years
Annualised Premium	₹ 7,600
Investment	₹ 17,363

		Term insurance + ELSS
Age	Year	Term Insurance premium + ELSS	Death benefit
40	1	-24,963	5,00,000
41	2	-24,963	5,00,000
42	3	-24,963	5,00,000
43	4	-24,963	5,00,000
44	5	-24,963	5,00,000
45	6	0	5,00,000
46	7	0	5,00,000
47	8	0	5,00,000
48	9	0	5,00,000
49	10	0	5,00,000
50	11	0	5,00,000
51	12	0	5,00,000
52	13	0	5,00,000
53	14	0	5,00,000
54	15	0	5,00,000
55		3,62,214

	IRR	8.49%

Selecting the right investment based on risk tolerance is essential. In this case, the surplus is invested in an Equity-Linked Savings Scheme (ELSS).

Since ELSS investments are subject to capital gains tax upon redemption, the pre-tax and post-tax maturity values are ₹3.83 lakhs and ₹3.62 lakhs, respectively.

This results in a post-tax IRR of 8.49%. The tax calculations are detailed below.

ELSS Tax Calculation
Maturity value after 15 years	3,83,700
Purchase price	86,815
Long-Term Capital Gains	2,96,885
Exemption limit	1,25,000
Taxable LTCG	1,71,885
Tax paid on LTCG	21,486
Maturity value after tax	3,62,214

This approach clearly demonstrates the benefits of separating insurance and investment. It offers a significantly higher corpus compared to the IndiaFirst Life Micro Bachat Plan while providing greater life coverage and superior returns.

Final Verdict on IndiaFirst Life Micro Bachat Plan

The IndiaFirst Life Micro Bachat Plan is a participating, limited-pay endowment plan designed to help you channel your savings while providing financial protection for your family. However, the maturity benefit, along with any bonuses, is unlikely to keep pace with the rising costs of long-term goals.

Investing in this plan may hinder your financial growth primarily because it combines insurance with investment and it also has a high agent commission.

Instead, securing your financial future with a pure-term life insurance policy is a more effective approach. When selecting a sum assured, consider your life goals and liabilities to ensure adequate coverage.A pure-term policy offers higher life coverage at a lower cost, allowing you to allocate more funds toward wealth creation and financial goal planning.

Building an investment portfolio tailored to your risk appetite is essential for long-term financial security. A well-diversified portfolio helps manage market fluctuations and enhances wealth accumulation.

Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?

For a comprehensive financial strategy, assess your risk tolerance, life goals, and investment horizon. Seeking guidance from a Certified Financial Planner can provide personalized insights and help you make informed financial decisions with confidence.